Property Sipp

A Self Invested Personal Pension or "SIPP" is a tax efficient investment vehicle for retirement provision. Technically a SIPP is a Personal Pension, but whereas a traditional Personal Pension is tied to an insurance company who dictate where you can invest and on your retirement steer you towards an increasingly expensive annuity, a SIPP allows you a greater degree of flexibility over your pension funds.

Cash within your pension fund can be used to purchase SIPP-qualifying property with all the rental income and capital growth going into your pension fund. Some investors use their SIPP to purchase commercial property that they run their business from, enabling their business pay rent to their pension fund.

SIPP Finance

If there is insufficient cash in your fund to purchase a particular property, the SIPP can take a mortgage which may enable any shortfall to be addressed. However, the amount that can be borrowed is a maximum of 50% of the net asset value of the SIPP immediately prior to the borrowing and will take into account any existing borrowing. It is possible to purchase a property jointly between a number of individuals provided they all have SIPPs with the same provider. However, monies cannot be borrowed to lend to a connected Company.

A popular option is to use a SIPP to invest in a property fund as this offers a greater degree of flexibility and diversity than SIPP investment in a single qualifying property.

Freedom from the constraints of annuity purchase, allowing the investor to choose how and when to take benefits without having to sign away the funds to an insurance company

Death benefits payable to nominated beneficiaries in an Inheritance Tax efficient manner

Please note that Propertyinvestment.co.uk does not provide advice on direct SIPP investment. Although we can advise you on the detail and types of SIPP qualifying property, you should seek specialist advice from an authorised SIPP provider. We introduce all interested clients to an authorised Financial Services Authority firm for this purpose. You should always seek advice from a qualified tax professional.